CardData 3Q/00

Mid-level card issuers continue to post strong increases in 3Q receivables despite modest gains in gross accounts and active accounts. San Juan-based Banponce reported 3Q/00 receivables of $541,542,530 compared to 2Q/00 receivables as $538,162,976. Banponce active accounts stood at 222,785 for the third quarter versus 223,664 for 2Q/00. AL-based Compass Bank reported 3Q receivables of $352,762,754 compared to $329,212,094 for the second quarter. Active accounts at Compass increased slightly from 182,989 to 189,007 between 2Q and 3Q. Meanwhile OH-based FirstMerit reported 3Q/00 receivables of $111,227,931 versus $107,659,843 for 2Q/00. Active accounts grew from 74,367 in the second quarter to 76,342 for the third quarter. For 3Q/00 results on more than 350 U.S. issuers visit CardData ([][1]).



EU Comm Cards

Visa International EU Region and PaySys International, Inc., a global leader in financial transaction processing applications, announced a marketing agreement to provide Visa EU’s member banks with a next generation commercial credit card transaction processing system.

![][1] This agreement marks the debut of PaySys’ new Commercial Payment System, developed on its new dBB technology platform. Currently, it is the only single payment processing system that combines real-time transaction processing capabilities with unlimited hierarchies and best-of-breed billing, payment and account management technologies. Visa EU plans to utilize each of these features to give its member banks the flexibility and efficiency to gain a competitive edge in the Internet economy.

After conducting extensive interviews among its member banks, Visa EU decided to create the ideal commercial card payment processing system to solve the difficult problems posed by international and Internet requirements. It created the specifications for such a system from the responses of its member banks.

PaySys’ new Commercial Payment System provides real-time, Internet-based payment and transaction-level data management in multiple languages and currencies. Initial testing revealed that the system solved the vast majority of the concerns voiced by Visa EU’s member banks — without any customization. The two companies have agreed to work together to incorporate all of the needs of the member banks in the PaySys built system. The final system will be available to member banks in 2001.

“We continuously try to provide our member banks with the best products and services available that will give them a competitive edge,” says Adrian New, Senior Vice President of Commercial Products at Visa International EU Region. “That was the impetus for creating the ideal commercial card payment processing system. PaySys’ Commercial Payment System not only meets the current payment demands faced by our members, it is also built with such flexibility that the banks will be able to continue to meet ever-changing demands in the future.”

“The advent of the Internet and the explosion of global commerce has created an environment that requires banks to have real-time transaction posting capabilities on a global scale,” said Stephen B Grubb, chief executive officer of PaySys. “Banks also need the ability to modify their processing systems quickly and easily to meet rapidly changing market demands. These are tough, complicated demands, but PaySys has leveraged two decades of payment processing experience to build such a system — something which no other company has been able to do.”

PaySys’ Commercial Payment System provides the core software infrastructure that enables the automation of payment and data transaction processes. More specifically, the system manages transactions from beginning to end, including account set up and management, transaction processing and billing, customer relationship management and payment processing for commercial credit cards and all forms of electronic business-to-business payments.

Steven M. Putney, executive vice president and general manager of the Commercial Payment Systems Division at PaySys, described how banks will benefit from this next generation processing system. “The system offers three important technological breakthroughs for Visa EU’s member banks. The first is a real-time posting engine that can process high volumes of transactions 24 hours a day, seven days a week in any language, dialect and currency. The second is its unlimited hierarchies, which will allow each member bank to customize payment parameters to match the individual needs of every customer.

The third is the proven ability to modify and expand the system quickly and easily to handle virtually unlimited levels of transaction growth, while also meeting ever-changing business and customer requirements. Only PaySys combines all of these attributes into one single system.”

About PaySys

PaySys International, Inc. is an established global leader in financial transaction processing applications, offering web-enabled transaction processing solutions. With industry-leading products such as VisionPLUS, CardPac and VISION21, and its latest Commercial Payment System, PaySys systems process more than 180 million accounts in over 35 countries and on 6 continents. Headquartered in Atlanta, PaySys has offices in the United States, England, Ireland, Singapore, China, Costa Rica and Australia. For more information, call PaySys at 1-770-564-8000, or visit the company’s web site at [][2].

About Visa Commercial Products

Visa Commercial Payment Solutions are tailored to meet the needs of its member banks and corporate clients globally. Visa International is experiencing 40% annual growth rates across its commercial card product lines. There are more than 12 million Visa commercial cards issued globally. Visa International’s three commercial card programs, Visa Business, Visa Purchasing and Visa Corporate respectively focus on: the payment needs of small businesses; the procurement needs of medium to large firms; and the travel and entertainment expenses of medium to large firms.

Visa’s Commercial Payment Solutions continue to be at the leading edge of enhanced data, new technologies and delivery channels, meeting changing commercial market needs. Visa’s business-to-business e-commerce initiatives have included online trading hubs, online procurement strategic alliances and global standards for worldwide interoperability.

About Visa International

As the “World’s Best Way to Pay,” Visa is one of the world’s leading payment brands and one of the largest payment systems worldwide. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa has more than 80 smart card programs in 35 countries and on the Internet, with 23 million Visa chip cards, including 8 million Visa Cash cards. Visa is pioneering SET Secure Electronic Transaction(TM) programs to enable and advance Internet commerce. There are over 1 billion Visa, Visa Electron, Interlink, PLUS and Visa Cash cards, which generate more than US$1.6 trillion in annual volume. Visa-branded cards are accepted at over 19 million worldwide locations, including at more than 627,000 ATMs in the Visa Global ATM Network. Visa’s Internet address is [][3].

[1]: /graphic/paysys/paysys.jpg


Hypercom Exec Changes

As of Nov. 1, George Wallner, president and CEO of Hypercom will become chairman of the board and chief strategist for the company. Christopher Alexander, who has been president of the Hypercom Transaction Systems Group since July 1999 and with the company since 1993, will assume the position of president and CEO of Hypercom. Jairo Gonzalez will replace Alexander as president of the Hypercom Transaction Systems Group. He has been president of Hypercom Emerging Markets since 1999. Jonathon Killmer will become COO in addition to his current duties as CFO and chief administrative officer. Albert Irato, who has been chairman of the board since July 1, 1999 and was president and CEO from 1992 through 1999, will become vice chairman of the board.


Providian Super Savings

In an effort to encourage more Americans to save for their future, Providian Financial Corporation said Tuesday it will begin offering a new account that pays regular savers about twice the interest rate paid on comparable savings accounts at most depository institutions.

Providian Chairman and CEO Shailesh Mehta said that the company developed its new “Planned Savings Account” in response to a need illustrated in a survey released yesterday, October 17, at a joint news conference with the Consumer Federation of America (CFA), AARP and Providian. The survey shows that Americans are losing tens of billions of dollars in interest income by keeping their money in low-yielding savings accounts.

Mehta said the company’s new “Planned Savings Account” will pay a variable interest rate that is currently three points higher than traditional savings accounts. Consumers who deposit at least $50 by electronic transfer in their account each month, or keep a minimum balance of $1,000, can avoid monthly fees. Based on today’s market rates, the initial rate on the new account is set at five percent for the first depositors.

Designed primarily for Americans with low or moderate incomes, the account will require a minimum initial deposit of $500. The new account will roughly match the yield on money market accounts that typically require account balances of $1,000 or more. The account also offers access to the deposited funds, unlike certificates of deposit or savings bonds, which often tie savings up for years. Deposits placed in the Planned Savings Account, like all deposits placed with Providian National Bank and Providian Bank, are FDIC-insured up to $100,000. Planned Savings accounts can be opened either over the phone at 800-414-9692 or online at .

“Financial institutions should help their customers save wisely,” Mehta said. “Study after study shows Americans don’t save enough, and too many of those who do save aren’t getting the best returns available. Providian is removing many of the more common barriers to savings.”

New Account Addresses Key Savings Barriers

The new account addresses a number of concerns identified by the CFA/Providian survey. The survey shows that many Americans stick with low-yield accounts because they don’t have the funds needed to open money market accounts or because they don’t want to tie up their money for the period required by most CDs and savings bonds.

“The minimum deposit is set at a level that most Americans can afford, and it enables depositors to withdraw their money if they need it,” Mehta said. “This is the type of option consumers need.”

Low-Yield Accounts Cost Americans $30 Billion a Year

Mehta noted the new survey shows that Americans are losing out on at least $30 billion a year by putting too much of their money in low-yield savings accounts.

Data provided by financial institutions show that Americans had more than $1.3 trillion in low-yield savings accounts at the end of 1998, the most recent year for which data were available. About six million Americans hold low-yield savings account deposits of $25,000 or more. Right now, those accounts typically pay about 2.1% interest. Savers would earn an additional $30 billion in interest each year if they shifted to certificates of deposit, Series EE U.S. Savings Bonds or accounts such as Providian’s Planned Savings Account program that pay approximately three percentage points more. They would earn $50 billion in additional interest by investing in accounts such as high-yield certificates of deposit that often pay five percentage points more.

Mehta said that, assuming a five percent interest rate, an individual who put $500 in a Planned Savings Account, and added $50 a month for 10 years, would have $8,500 at the end of that period — about $1,200 more than in traditional savings accounts, which are currently paying about 2.1 percent.

Account Could Help Senior Citizens

The Providian Planned Savings Account should be attractive to older Americans, who tend to hold the largest sums in low-yield savings accounts. The survey shows that nearly half (41.7 percent) of the six million Americans who hold accounts of $25,000 or more are older Americans.

“It is troubling to find that older Americans — many of whom rely on savings for their livelihood — are the very ones who are missing out on precious interest income,” added Mehta. “This account gives seniors a chance to earn more, with the liquidity they require, in an account that looks a lot like the traditional savings account that many older Americans are accustomed to.”

About Providian

San Francisco-based Providian Financial () is a leading provider of lending and deposit products to customers throughout the United States and offers credit cards in the United Kingdom and Argentina. Providian Financial was recently named one of America’s Most Admired Companies by Fortune magazine, the nation’s top financial institution by U.S. Banker magazine, and one of the most technologically innovative companies in the U.S. by Information Week magazine. With a commitment to 100% customer satisfaction, Providian helps customers build, protect and responsibly use credit. Providian has more than $27 billion in assets under management and over 14 million customers.


Trintech & Oracle

Trintech announced it has joined the Oracle Wireless Partner Initiative to provide the wireless payment solution that powers Oracle’s mCommerce platform.

As part of this new initiative, Trintech’s payment technology for mCommerce, PayWare mAccess, will be integrated with Oracle’s 9i Application Server Wireless Edition. This solution will allow wireless operators and service providers to take advantage of a fully integrated and functionally rich mCommerce suite including a powerful payment platform enabling mCommerce transactions.

![][1] Trintech’s PayWare mAccess is a modular, server-based mCommerce payment solution that enables ‘one touch’ payment via mobile devices with sophisticated built-in security features including voice authentication providing a secure and convenient solution for the user. Oracle’s9i Application Server Wireless Edition provides numerous software services designed to support widespread access of all applications via the Wireless Internet by any device.

“We are pleased to be working with Oracle, a leading global software company with a history of providing innovative solutions to e-businesses, to extend this opportunity to the mobile Internet and help eBusinesses to strengthen their mCommerce initiatives,” said Trevor Healy, general manager of Trintech’s mCommerce Business Unit. “Trintech plans to work extensively with Oracle to promote this integrated payment platform so that operators can immediately benefit from the global mCommerce opportunity.”

“For mCommerce to take place, operators must be able to provide a trusted and convenient payment solution to their subscribers,” said Thomas Kurian, vice president, E-Business. “Oracle9i Application Server Wireless Edition has the flexibility and functionality that enables us to integrate with Trintech’s payment product to offer a complete mCommerce solution.”

About Trintech

Trintech is a leading provider of secure electronic payment infrastructure solutions for real world, Internet and wireless transactions. The company, which was founded in 1987, offers a complete range of payment software products for credit, debit, commercial and procurement card applications. Trintech’s secure product range, deployed in over 35 countries worldwide, covers the payment requirements of consumers, card issuing banks, merchant acquiring institutions, merchants, eMerchants, telcos, wireless operators, ISPs/CSPs, portals and large corporations. Trintech’s range of scalable, open systems architecture solutions for UNIX(R) and Windows NT(TM) platforms provides the payment infrastructure necessary to facilitate eCommerce, mobile commerce and the emerging world of television commerce. Trintech can be contacted in the U.S. at 2755 Campus Drive, San Mateo, CA 94403 (Tel:650/227-7000) and in Ireland at Trintech Building, South County Business Park, Leopardstown, Dublin 18 (Tel:353-1-207-4000). Trintech can be reached on the Web at [][2]. Investor information can be found at [][3].

About PayWare eIssuer and mAccess

Trintech’s PayWare mAccess is a modular, server-based mCommerce payment solution that enables card issuing banks, portals/ASPs, content providers and wireless network operators to securely process card payment transactions from a variety of wireless devices, including cell phones and PDAs. When deployed in conjunction with Trintech’s PayWare eIssuer, a server-based consumer payment technology, wireless users benefit greatly from enhanced security and “one touch” form fill of mobile commerce merchant payment pages.

About Oracle’s Wireless Partner Initiative

Oracle recently launched its Oracle Wireless Partner Initiative to assist independent software vendors (ISVs), application service providers (ASPs) and system integrators (SIs) deploy wireless portals and Internet applications and services. Oracle’s wireless Internet software includes its market-leading Oracle9i AS Wireless Edition and a set of wireless development tools. The new initiative is part of the Oracle Partner Program.

About Oracle9i Internet Application Server Wireless Edition

Oracle9i AS Wireless Edition (formerly Portal-to-Go) allows companies to wirelessly enable any new or existing internet applications or content for any Web-enabled device including: smart phones, pagers, PDAs, handheld computers, standard phones connected to interactive voice recognition (IVR) systems, etc.

Oracle9i AS Wireless Edition adapts any Internet content to XML and transforms it to any markup language supported by any device (HTML, WML, HDML, VoiceXML, VoxML, SMS, etc.). With its open architecture and use of XML technology, Oracle9i AS Wireless Edition ensures support of current and emerging standards. In addition, Oracle9i AS Wireless Edition provides for location-based services, wireless messaging, wireless e-commerce, and extensive personalization for users and devices, allowing for customization of services as well as device display. Using Oracle9i AS Wireless Edition companies can quickly build or extend existing Web services and applications for the wireless internet.

[1]: /graphic/oracle/oracle.gif


Sears Goes eFalcon

Sears, Roebuck and Co. plans to implement eFalcon, the leading real-time Internet fraud detection solution from HNC Financial Solutions, a division of HNC Software Inc., to enhance the fraud detection capabilities on its Web site.

![][1] Sears selected the system based on its successful experience with HNC’s Falcon Retail fraud detection system, which Sears implemented to help protect its retail card portfolio from fraud losses.

According to Media Metrix Inc., Sears’ Web sites lead the department store retail category in number of visitors, attracting nearly 2.5 million unique visitors in July of this year.

“With the growing number of people shopping at, we determined that our best choice is a real-time fraud detection system designed specifically for online businesses,” said Ed Barclay, Sears vice president of Asset Protection. “eFalcon affords us the opportunity to enhance our fraud detection capabilities and to leverage our existing relationship with HNC, which has provided us with proven fraud detection solutions that have performed well against our high standards.”

Sears currently uses HNC’s Falcon Retail fraud detection system to protect the credit accounts of more than 60 million customers. The retailer also recently began implementing a credit card-specific Falcon model to protect its new, co-branded Sears Gold MasterCard offering. Sears is the largest issuer of private-label cards, with a card loan portfolio of nearly $27 billion.

“We’re proud to provide our fraud detection solutions to a leading retailer like Sears, which has long been proactive in the battle against fraud,” said Walter Lee, vice president of risk management for HNC Financial Solutions. “eFalcon provides Sears with the most comprehensive online payment fraud detection system available for its Internet operations.”

A recent survey by GartnerGroup of the top 200 Internet merchants found that fraud is their primary concern, since they are liable for disputed purchases in card-not-present transactions, and 93 percent of online transactions are done with payment cards.

eFalcon is an intelligent Internet-credit fraud detection and risk-management solution that lowers fraud losses and increases revenue opportunity for online merchants and service providers. eFalcon uses neural network-based predictive software to examine transaction, customer, and merchant data in real time to enable e-merchants to prevent payment fraud.

About Sears, Roebuck and Co.

Sears, Roebuck and Co. is a leading U.S. retailer of apparel, home, and automotive products and services with annual revenue of nearly $40 billion. The company serves families throughout the U.S. through approximately 860 department stores, more than 2,100 specialized retail locations, and a variety of online offerings accessible through the company’s Web site at [][2].

About HNC Financial Solutions

HNC Financial Solutions is a leader in the development of intelligent customer value management software solutions for the financial services and e-commerce industries. Its powerful suite of real-time decision platforms and predictive business solutions allows firms to automate new account decisioning, optimize marketing efforts, detect fraud, predict profitability, and manage the customer lifecycle. HNC Financial Solutions supports this suite of solutions with a full range of consulting services.

About HNC Software Inc.

Headquartered in San Diego, HNC Software Inc. is a leading provider of predictive software solutions for the financial, insurance, telecommunications, and e-commerce service industries. HNC’s suite of predictive software solutions can provide real-time insight into customer relationships based on transaction-level data, helping companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability; and detect fraudulent customer transactions. For more information, visit HNC’s Web site at [][3] or contact Melinda Bateman, HNC Software Inc., 5935 Cornerstone Court West, San Diego, CA 92121, 858/799-3880.

[1]: /graphic/hnc/efalcon.gif


e-Galleon Card

Schlumberger Tuesday introduced a new range of smart payment cards that offer local customization and the global interoperability of ‘Europay, MasterCard and VISA’ (EMV). With the new ‘e-Galleon’ cards, holders can use the same smart payment card wherever they travel. At the same time, local procedures (the use of a PIN or signature for customer ID, for example) and conditions (such as the perceived level of fraud risk) mean that the card issuer will wish to undertake a degree of customization. The ‘e-Galleon’ offering allows issuers to reflect local practice and strike the right balance between security and speed of transaction. The card can be used off-line to maximize speed and convenience for customers and retailers within high levels of security. Should local conditions require, issuers can specify that certain transactions, those above a certain value for example, should be carried out on-line, as an additional safeguard. The secret of the card’s versatility is its exceptionally powerful processor, supporting high transaction speeds and high levels of security, and the capacity to host multiple applications.


Cross View Solutions

Experian yesterday launched a unique risk management tool which blends debit information with credit data. ‘Cross View Solutions’ will provide shared access to leading nationwide debit and credit databases to facilitate credit card issuers to more confidently offer services to creditworthy consumers with limited or no credit history. Besides Experian’s credit data, ‘Cross View’ collects information from eFunds’ ‘DebitBureau’, the country’s largest single source for debit data, containing more than 2.7 billion records related to checking account opening and closing information, checking account collections data and overdraft histories and check order histories. The repository is updated with approximately 1.7 million records each day, receiving information from more than 82,000 retail locations, 86,000 financial institution locations and other reputable sources. ‘Cross View’ is a highly predictive and customizable resource with real-time access of both credit and debit data, plus prescreen segmentation, account review overlays and account monitoring triggers.


AmEx Williams

eBizJets, a leader in executive jet transportation services, announced the appointment of John I. Williams, Jr. as Chief Executive Officer.

After building, which was sold to Rosenbluth International, the former American Express veteran fills the top spot for the expanding business jet service provider outside Boston.

An instrument-rated pilot with more than 1,400 logged flight hours and a history of enabling successful business models in both the Internet and travel markets, Williams is a real win for eBizJets. In making the announcement, President and co-founder Jeff Creed said, “John brings with him an intimate knowledge of our customer base from his years with the American Express Platinum Card; experience in Web-enabled travel services from and exceptional dedication to customer service. In our current expansion, we need someone with a demonstrated track record in building successful businesses. We look forward to benefiting from John’s insights and marketing expertise.”

Williams’ first priority as CEO will be to take over responsibility for the company’s operations, marketing and technology strategy, enabling co-founders Creed and Paul Svensen to focus on business development and carrier relations.

Prior to joining eBizJets, Williams served as president and CEO for, Inc. While under his stewardship, the privately-held, Internet-based, travel related services company for frequent business travelers won several prestigious industry awards including the 1999 Webby Award and PC Magazine’s Editor’s Choice award. Undoubtedly Williams’ career hallmark is his dedication to customer service. His extensive experience also includes eight years with American Express during which he served as vice president for the highly regarded Platinum Card and as senior vice president/general manager of the Consumer Travel Network where he supervised the company’s 850 retail travel offices, quadrupling earnings.

A graduate of Harvard Law School, Harvard Business School and Amherst College, Williams lives in Boston, Massachusetts with his wife and three children.

eBizJets is privately-held and is a portfolio company of CSFB Private Equity, the $3.7 billion private investment arm of the global Credit Suisse Group. The company serves as an agent for a number of independent air carriers and acts as an intermediary between carriers and passengers. It assists customers to obtain air transportation from a carrier that eBizJets represents. eBizJets is not an air carrier, and does not own or operate the aircraft on which its customers fly. The carriers are fully licensed by the Federal Aviation Administration and the U.S. Department of Transportation and are responsible for the air transportation arranged by eBizJets on behalf of its customers.


LaserCard Shipments

Drexler Technology Corporation, producer of LaserCard optical memory cards, LaserCard read/write drives, and related software, reported results for its fiscal 2001 second quarter and first six months ended September 30, 2000.

For the second quarter of fiscal 2001, income before taxes rose 63%, to $1,193,000, on a 30% revenue increase, while for the first six months, income before taxes rose 70%, to $2,005,000, on a 34% revenue growth as compared with the same periods last year. Net income, revenues, and cash status are reported below.

For the fiscal 2001 second quarter ended September 30, 2000, net income rose 19% to $1,654,000, or 16 cents per share diluted, versus $1,387,000, or 14 cents per share diluted, for last year’s second quarter. Fiscal 2001 second-quarter revenues rose 30% to $5,531,000 compared with $4,252,000 for the fiscal 2000 second quarter.

For the six months ended September 30, 2000, net income rose 39% to $3,094,000, or 30 cents per share diluted, versus $2,232,000, or 23 cents per share diluted, for the six months ended September 30, 1999. Revenues for the first six months of fiscal 2001 increased 34% to $10,702,000 from $7,993,000 for last year’s first six months.

The Company’s stockholders’ equity and cash position have improved significantly. For example, stockholders’ equity has risen to $24.9 million from $17.3 million a year ago and from $4.3 million in mid- 1997, just before the Company began generating profits from sales of its optical memory cards. The Company has no debt. Also, the Company’s cash, cash equivalents, and short-term investments rose 45% in the first six months of fiscal 2001, to approximately $11,891,000 at September 30, 2000, from approximately $8,221,000 at March 31, 2000. In anticipation of this cash increase, on July 13, 2000 the Company announced a plan to spend up to $3,000,000 in repurchasing shares of the Company’s common stock in the open market, of which less than $300,000 of this amount has been spent thus far.

Net income for the fiscal 2001 second quarter included an income tax benefit of $461,000 compared with $657,000 for last year’s second quarter. Net income for the first six months of fiscal 2001 included an income tax benefit of $1,089,000 compared with $1,056,000 for last year’s first six months. These amounts were recorded under Statement of Financial Accounting Standards No. 109 (SFAS 109), “Accounting for Income Taxes.”

LaserCard(R) optical memory card shipments reached 1,279,000 cards in the second quarter compared with 1,070,000 cards in the second quarter of fiscal 2000. LaserCard(R) read/write drive shipments set a quarterly record of 499 drives, which compares to 258 drives in last year’s second quarter. The optical memory cards and read/write drives are manufactured by Company personnel in Mountain View, California.

Headquartered in Mountain View, Drexler Technology Corporation ([][1]) manufactures LaserCard(R) optical memory cards used for immigration, healthcare, automotive, ID/access, data logging, and other digital read/write wallet-card applications for optical memory cards and hybrid smart optical cards. Drexler’s wholly owned subsidiary, LaserCard Systems Corporation, makes optical card read/write drives, develops optical card system software, and markets card-related systems and peripherals.

As of September 30, 2000, there were 9,941,051 shares of Drexler Technology Corporation common stock outstanding compared with 9,814,904 shares outstanding as of September 30, 1999.

Drexler Technology Corporation and Subsidiaries
Summary Consolidated Statements of Operations (Unaudited)
(In Thousands, Except per Share Data)

Three Months Ended Six Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
——- ——- ——-

Revenues $5,531 $4,252 $10,702 $7,993

Cost of sales 2,872 2,357 5,886 4,520

Selling, general, and
administrative expenses 1,010 989 2,038 1,993

Research and engineering
expenses 606 269 1,035 483

Other income, net 150 93 262 179
—— —— ——
Income before income taxes 1,193 730 2,005 1,176

Income tax expense
(benefit) (461) (657) (1,089) (1,056)
—— —— ——
Net income $1,654 $1,387 $3,094 $2,232
====== ====== ======
Net income per share:

Basic $ .17 $ .14 $ .31 $ .23
====== ====== ====== ======
Diluted $ .16 $ .14 $ .30 $ .23
====== ====== ====== ======

Shares used in computing
net income per share:

Basic number of shares 9,904 9,799 9,888 9,797
====== ====== ======
Diluted number of shares 10,540 9,856 10,394 9,875
====== ====== ====== ======



First USA 3Q/00

First USA continues to struggle with profitability but appears to be making progress. Yesterday First USA reported net income of $177 million, a 39% decrease from the year-ago quarter. Third quarter results reflected a 1.7% pretax return on outstandings, down from 2.5% in the year-ago quarter, but up from 1.1% in the second quarter on an adjusted basis. Net interest income of $1.442 billion was essentially unchanged from the second quarter but decreased $291 million, or 17%, from the year-ago quarter. First USA says the principal drivers were lower average outstandings and fee revenue, as well as a narrower spread. Average managed outstandings for the third quarter were $65.9 billion, down 5% from the year-ago period and relatively flat with the second quarter average. First USA had 53.6 million cards issued at quarter end, with 727,000 new accounts opened during the quarter. The managed net charge-off rate declined to 5.03% from 5.33% in the year-ago period and from 5.44% in the prior quarter reflecting lower bankruptcies. The managed 30-day and 90-day delinquency rates were 4.14% and 1.79%, respectively. These were down from 4.74% and 2.07%, respectively, in the year-ago quarter, but up slightly from the prior quarter. Third quarter charge volume was $34.6 billion compared to $35.8 billion for 2Q/00 and $36.1 billion one year ago. For complete details on Bank One/First USA’s 3Q/00 results as well as prior quarter financials visit CardData ([][1]).



GiftCertificates New CEO, a leading online marketplace for gift certificates and a provider of technologies and services, announced that Michael Ahern has been named chief executive officer. He will be succeeding the company’s founder, Jonas Lee, who will assume the position of vice chairman of the company’s board. These appointments are effective immediately.

“It has given me great pride to see grow from an idea into a company with over 300 talented people and hundreds of thousands of consumers and businesses that use our services,” said Jonas Lee, vice chairman of the board. “With Mike’s leadership ability and execution experience, I am confident that the company will have the right guidance to ensure its continued success.”

“ has achieved a great formula for success in offering gifts to consumers and is in a very favorable position to capitalize on the trend toward businesses offering gift certificates for rewards, incentives and promotions,” said Michael Ahern, CEO of “I look forward to continuing to work with our management team to successfully deliver on our plans.”

Ahern assumes the day-to-day responsibilities of CEO from Lee who moves into an active advisory position as vice chairman of the board. He will be working closely with recently named chairman of the board, William Ackman, in addition to pursuing new entrepreneurial interests.

Ahern most recently served as the company’s chief operating officer with responsibility for directing all internal operations and overseeing all aspects of technology and product development for the company. He joined after the company’s May 2000 acquisition of, where he had been co-founder, president and CEO. Previously, Ahern was an executive at Microsoft Corporation where he held various management positions and served as group project manager for Microsoft’s $350 million Project Management product line, as well as Microsoft NetShow, Commerce Server and SiteServer. Before his tenure at Microsoft, Ahern was a founding member of Autodesk’s Multimedia Division serving as product manager for Animator, 3D Studio and AutoCAD.


Established in 1997, is a leading Internet marketplace for gift certificates and a provider of related technologies and services. The company offers physical and emailable gift certificates for employee incentives, customer loyalty programs, marketing promotions, and consumer gifts. also provides turn-key solutions that allow merchants of all sizes to outsource their physical and emailable gift certificate fulfillment requirements. The company represents more than 500 merchants, including luxury retailers like CHANEL, Neiman Marcus, and Tourneau; national retailers like Barnes & Noble, Bloomingdale’s, Brooks Brothers, Crate and Barrel, Macy’s, and The Sharper Image; travel-related services like American Airlines(R) and Marriott Hotels, Resorts and Suites; and popular restaurants like the Palm, McCormick & Schmick’s, Benihana, and T.G.I. Fridays(R). The company also offers the SuperCertificate(TM), a flexible gift certificate that can be redeemed at for original gift certificates to 100’s of participating merchants. For more information, visit [][1].